JUDGEMENT
ANAND, J. -
(1.) THE constitutional validity of the Jammu and Kashmir Excise (Amendment) Ordinance, 1985 being Ordinance No. 11 of 1985, which
inserted section 14 -A (1) & (2) in the Jammu and Kashmir Excise Act,
Samvat 1958, besides amending section 25 of the said Act has been called
in question through the medium of these two petitions. Section 14 -A (1)
and 14 -A (2) of the Ordinance read as follows ;
œ14 -A. Regulation of sale of liquor in the State: - (1)
Notwithstanding anything to the contrary contained in any other law,
rule, order, agreement or any other instrument of any other judgment or
decree of any court, the Government shall regulate the sale of country
liquor in the State by auctioning the country liquor shops on such
condi tions and for such period as it may deem fit.
Provided that the departmental shops existing for the sale of
country liquor at the time of first auction shall continue to run at such
places and for such period as may be specified by the Government by a
special or general order.
(2) Any agreement or instrument executed, any letter of intent or
order issued by the Government relating to manufacturing, bottling or
sale of country liquor, before the commencement of the Jammu & Kashmir
Excise (Amendment) Ordinance 1985 shall be and shall always be deemed t6
have been without effect.
(2.) THE backdrop under which the provisions came to be challenged as emanating from the pleadings of the parties in Modiera Bottlers Firm
Pvt. Ltd., may first be noticed in brief :
The petitioner -firm submitted a proposal to the Govt. of J&K
seeking right to manufacture, bottle and market country liquor in the
State of Jammu and Kashmir. In response to its proposal, a communication
was addressed to the petitioner -firm on 28.11.1983 by the Excise
Commissioner J&K Government, wherein after making a reference to the
proposal made by the petitioner - firm it was stated that:
œIn this connection I am to say that the State Government
approves the proposal in principle. This will, however, be subject to the
finalisation of all specific details including the fixation of excise
duty and sales tax to the satisfaction of the government. In order to
finalise these details, a committee consisting of Commissioner and
Secretary to Govt., Planning and Development Department, Commis sioner
and Secretary to Government Finance Department; Commis sioner, Sales -Tax
and the undersigned has been appointed by the government. After
consideration of various details in your proposal you would be required
to discuss the matter with this committee on a date which shall be
communicated in due course .
The petitioner -firm has styled this communication as œletter of
intent issued by the respondents in favour of the petitioner firm
authorising the manufacturing, bottling and marketing of the country
liquor in the State of Jammu and Kashmir. According to the
petitioner -firm, relying upon the said œletter of intent and
treating it as an œassurance to go ahead with the manufacture,
bottling and marketing of the country liquor m the State of Jammu and
Kashmir, it proceeded with the construction of a factory, after getting
some land allotted from the SIDCO for the same purpose. The
respondent -State, however, decided to auction the country liquor shops in
the State and the petitioner -firm filed writ petition No. 873 of 1984 in
the Jammu Wing of the High Court invoking the doctrine of promissory
estoppel and sought by way of interim relief, an order to restrain the
conduct of auction of country liquor shops in the State. In the
application seeking interim relief, being C.M.P. No. 1821 of 1984 the
following order came to be passed on 29.11.1984 :
Also heard on C. M. P. No. 1821 of 1984.
Issue notice of the C.M.P. also returnable within three weeks.
Till then the implementation of the excise auction notification to be
held on November, 30, 1984 is stayed. At this stage Mr. F.A. Goni,
learned Government Advocate takes notice and submits that a short date be
given for filing the reply to the C.M.P. with respect to the public
auction scheduled to be held on November 30, 1984. In view of the
acceptance of notice by Mr. Goni, learned Government Advocate, the case
is now fixed for December 5, 1984, for further orders. Till then by
modifying the above order passed of stay, the further proceedings for the
proposed auction in question shall remain stayed.
Objections were filed to the aforesaid Civil Misc. Petition,
besides filing the counter and rejoinder to the main writ petition. The
prayer made in the aforesaid writ, petition was for the issuance of a
writ, order or direct ion to the respondents to treat the letter of
intent issued in favour of the petitioner on 28.11.1983 as a licence for
blending, bottling and selling of country liquor in terms of the Jammu
and Kashmir Excise Act, Samvat 1958 or in the alternative for the
issuance of a direction to issue a formal licence in favour of the
petitio ner under the said Act.
(3.) WHILE the said writ petition was pending disposal h the High Court a Bill was introduced in the J&K Legislative Assembly, being Bill
No. 14 of 1985 titled œthe Jammu and Kashmir Excise (Amendment) Act
1985 . The bill sought to insert Section 14 -A (1) and (2) and amend section 25 in the Jammu and Kashmir Excise Act, Samvat 1958. The
statement of aims and objects attached to the bill reads as follows ;
œSTATEMENT OF AIMS AND OBJECTIVES
The experience of most of the States of the Union in general and
our neighbouring States in particular show that the excise revenue is
maximized by putting the country liquor vends to open auction and
accordingly the Government took a considered decision to switch over to
the auctioning of country liquor vends rather than giving them to a
single individual or running them departmentally. While finalizing the
resources position of the State for the year 1985 -86 with the Planning
Commission additional excise revenue to the tune of Rs. 15 crores had
been anticipated on account of auction of country liquor vends. It could
not, however, materialize because a few writs have been filed against the
policy and orders of stay obtained from High Court. The share of the
excise revenue in the estimates of additional resources mobilization for
the 7th Five Year Plan period is a major one. The 7th Five Year Plan and
the allocation approved by the Centre are based on these projections, and
therefore, it is of utmost importance for us to realise the targets we
have set for ourselves in this behalf. This year being the first year of
the 7th Five Year Plan period increases the importance of issue.
In view of the difficulties, in putting into operation the new
excise policy, amendments to the existing provisions of the State Excise
Act appears necessary, in the light of our commitments made to the
Planning Commission we can ill -afford to take any chances, should the
judgment of the Honble High Court in the above referred writs go against
the State and hence the need to amend the Excise Act suitably.
The Bill was introduced on 16.9.1985 and on 18.9.1985, it was
referred to a select committee of the House with the direction to the
com mittee to submit its report to the House on 23.9.1985. The select
committee met on 20th, 21st & 23rd of September, 1985 and on 23.9.1985,
submitted its report wherein it was suggested that Bill be withdrawn. The
bill was accordingly withdrawn on 24. 9.1985. The House was adjourned on
24.9.1985 sine die and was prorogued on 8.10.1985. The impugned Ordin ance came to be issued on 25.10.1985.
The petitioners have questioned the ordinance on various grounds to which a reference shall be made in the latter part of this
judgment. In Modiera Bottlers petition it was averred in para 7 of the
petition that the pleadings in the earlier writ petitioner be treated as
a part and parcel of the present writ petition & that the government
should be bound by the doctrine of promissory estoppel to honour its
commitment & to give the firm the exclu sive privilege of blending,
bottling, manufacturing and selling of the country liquor. On behalf of
the respondent -State, the attempt of the petitioner to invoke the
doctrine of promissory estoppel was stoutly resisted firstly on the
ground that the so called œletter of intent dated 28.11.1983 could,
by no stretch of imagination be constituted as any assurance on the part
of the government to the petitioner that it shall get the exclusive
privilege of manufacturing, bottling and selling country liquor and that,
in fact, no assurance of any type was given out by the government and
that whatever other steps the petitioner look for construction of the
factory etc , were taken by him with a view to pressurize the government
and that the steps taken by the petitioner -firm to construct the factory,
were not even autho rised by law. Secondly, it was contended that there
could be no estoppel against the statute and, thirdly, that the Govt. as
well as the legislature has the jurisdiction to change it policy in the
public interest and that it is not open to any party to contend that the
government should remain a slave of its own policy decision and can,
under no circumstances, alter or change it even if the change has to be
made in public interest. This aspect of the case, however, would not
detain us because Mr. Handoo, learned counsel for the petitioner, has
stated at the bar that no finding be recorded with regard to the
availably or non -availability of the doctrine of promissory estoppel in
favour of the petitioner because, urged Mr. Handoo the question of
pro missory estoppel would be debated in the earlier writ petition and
that in this writ petition it is not necessary to decide that question.
Learned counsel stated that the pleadings to that effect in the writ
petition be taken as not pressed by him for the purposes of the decision
of the present writ petition the ambit of which maybe confined to the
determi nation of the constitutional validity of the Ordinance. In view
of the sub mission of Mr. Handoo we refrain from expressing any opinion
on the merits of the controversy with regard to the availability or
non -availability of the doctrine of promissory estoppel or its
applicability to the case of the petitioner.;